American Express, Chase & Discover all sent out 1099 forms for referral bonuses recently. One issue with the forms that Chase sent out was that paperless bonuses for 500 points were included as well, but instead of counting for $5 they counted for $500 ($1 per point). We brought this issue to Chase’s attention and they have now provided the following official statement:
We sent out some IRS Form 1099-MISCs with incorrect dollar amounts from Chase Bank USA, NA. We apologize. We’re double-checking our files and will send out Corrected 1099-MISCs to affected customers as soon as we can.
It’s not clear if these corrected 1099-MISC forms will cover the paperless bonus issue only, or other issues such as retention and upgrade bonuses also being included will be corrected.
Update on my case: After receiving an incorrect 1099-MISC which counted the paperless $5 bonus as $500, I called in to the number listed on the 1099 on 2/5/19 and explained the issue. On 2/23, I received a corrected 1099 that states the other income as $5. However, this sucks since on the other card, I had a referral bonus of $100, so now I have to actually use this 1099 on my tax return. Had they not made the mistake in the first place, the 1099 might not even have been issued since it was not over $600.
My total other income from Chase on the 1099 is $110 ($105 on one card and $5 in the second card, which accounts for 1 $100 referral bonus and 2 $5 paperless bonuses).
I signed up for paperless statements on three credit cards. I was sent a 1099-MISC stating i needed to report 1005 in income-$5 for one account and $500 each for the other two. The kicker is I never even received the total of fifteen dollars. Chase has been rude and no help and delays peoples ability to file telling me it may not have a corrected 1099 until after April 15. There should be consequences for this inexcusable error to Chase and compensation to the consumer. I’d like to know the number of persons affected who’ve been delayed in filing and receiving a return.They should be hit with penalties and a class action
If Chase is actually sending out corrected 1099s, that’s a surprise to me. I wonder if they are truly aware of the depth of the problems they have caused.
I received 2 1099 MISC earlier this month for $500 and $100. One was for a Chase Freedom Unlimited card which I had downgraded from Sapphire Preferred over 2 years ago. I received nothing from Freedom Unlimited except for the 1.5 points per dollar spent. One oddity of my situation is that my CC number was reissued in mid-December 2018 because I submitted a dispute on the prior number and Chase opted to close the account and issue me a new card and number.
I complained to Chase via the CFPB portal and even got a call from Chase’s executive office which handles credit cards. Unfortunately, they issued a letter today claiming that the $500 was for a bonus I received. They never provided any documentation forthis claim except to a link of the usual terms and conditions which explains nothing relevant to my situation.
The second 1099 MISC for $100 (which I guess brings me up to the $600 threshhold) was for a Sapphire Preferred card that I cancelled about a year ago. I received the 50K sign up bonus in 2017 but nothing since. What is of interest is that Chase told me that once a card is cancelled, records are no longer available. The cancelled card was on my dashboard for a few months but has disappeared. So I can’t retrieve any account records. Chase may be willing to do it if you scream loud enough, but I only got them to agree to send statements for 2018. What I really needed was 2017.
As for speaking with card reps and phone reps at the 1099 number—good luck with that. They are clueless. Even the 1099 reps are flummoxed and told me they could not help because they did not have access to my account records.
I doubt the correction will affect anything except the clear mistakes on paperless bonuses (and other rare cases where 1099s were sent with no income at all) … when I talked to Amex (not Chase, but still a DP), the manager there was very specific that 1099s include not only referral bonuses, but also retention bonuses and any other courtesy points.
Also, I doubt that Chase would be able to send corrected 1099s for $0 for people who earned some, but less than $600 with proper paperless bonus calculations.. as reporting it as $0 will be misinforming IRS. We will see…
Someone explain why the terms in many different credit card usage rebate programs, aka ‘rewards’, say that points have no cash value and yet something with no cash value can be deemed as ‘income’ by anyone? Will credit card issuers with rebate programs (you don’t get points without having their credit card whether points from bonuses, usage or referring , from what I’ve experienced) end up changing those terms? I’m not talking about interest gained from actually having your money sitting in an interest earning account, but this concerns credit cards. We all know points earned from credit card programs have been ruled as a rebate. I can understand referral CASH bonuses, but points used to offset spending in some manner being considered interest or income seems like a stretch especially when they are from a CREDIT card account. I’m just trying to understand the logic and legal precedent. I’m not an expert and this is not advice. Also, I never received a 1099 as people have been talking about and my family is now limiting credit card referrals, usage and have stopped ALL applications for any credit card until this is cleared up. Do they want us going back to using cash for transactions?
Why are retention credits even counted? It’s literally a subtraction from the annual fee you paid chase. Hardly income.
That only counts if they actually decreased the annual fee. Otherwise, it is considered a bank gift/payment. You could try to argue it with the IRS if you get audited which is virtually zero chance for a few years.
Are these forms available online?
do you know anyone by amex to change their evaluations? 🙂
i just got another 1099 from amex and now i’m truly boggled. they valued (old) spg and marriott as the same 1 cent per point! i got a 1099 for $75 for 7500 spg points, and a $550 1099 for 55k marriott. go figure
Why do you want them changed? 7500 SPG >> $75
If someone complains and causes them to reissue me a higher 1099 for my Starpoint referrals last year I’m going to be pretty disappointed.
i want the marriott changed…
If Amex is doing this to get the write offs they won’t decide in your favor. Your Marriott points would stay the same and the value of your SPG would triple.
Shushhh, why in the world would you alert Amex that they can get more tax deduction.
why do you think the only way for them to write it off as a tax deduction involves your 1099’s? they write it off regardless of sending you a 1099
If the corrected form brings the amount down below $600, will they cancel the form instead?
Was wondering the same. I’m guessing they’ll just send it out for the corrected amount, below $600. Which means a lot of people win end up losing (or at least increasing their hassle) from the mistake.
Poor souls.
I’ll ask for clarification regarding this as well.
Always glad to have someone with truly only our backs with an in on the banks. Thanks for always taking the time to help the readers (and non-readers in this case) out. Best in the biz.